1. Anıl Sural
080406051
Business Administration

2. ‘’ Globalization is widely believed
to have had a generally positive
impact on global economic growth. ‘’

4. There is growing concern in Europe over the impact of
globalization on high and evenly shared living standards.
These concerns have often surfaced in response to falling
labor income shares in aggregate national income data.
However, these data may tell little about the underlying
distribution of incomes based on household disposable
incomes. While summary measures of income distributions
also suggest that inequality has increased in most
industrialized countries, this development was
very uneven and much less pronounced in euro-area
countries, suggesting that broad phenomena such as trade
liberalization and technological change may not be major
drivers of inequality.

6. Income inequality has increased in many advanced economies over
the past two decades. In some continental European countries,
however, inequality rose only modestly, or even declined. The
inequality upswing was much larger in the United Kingdom and
the United States. Gini coefficient of net disposable household
income rose from 27 in the late 1970s to 34 in the late 1990s,
showing that inequality increased by almost30 percent. Trends in
income inequality across advanced economies have been quite
different. In the United States, which started out with a relatively
high degree of income inequality, it has increased even further.
However, other countries with initially low levels of income
inequality, including Denmark, France and the Netherlands, saw
some further decline.

8. What is the Gini coefficient ?
The Gini coefficient (also known as the Gini index or Gini ratio)
is a measure of statistical dispersion developed by the Italian
statistician and sociologist Corrado Gini and published in his
1912 paper "Variability and Mutability" (Italian: Variabilità e
mutabilità).
The Gini coefficient measures the inequality among values of a
frequency distribution (for example levels of income). A Gini
coefficient of zero expresses perfect equality where all values are
the same (for example, where everyone has an exactly equal
income). A Gini coefficient of one (100 on the percentile scale)
expresses maximal inequality among values (for example where
only one person has all the income).

11. In recent years, theoretical research on the link between
globalization and world inequality has been intense.
However, analysis of the link at the empirical level is
scarce. The causal connections between globalization
and inequality in developing nations are best
understood by building on what we have learned about
inequality change during the pre-globalization phase.
Extensive empirical research points to two stylized facts.
First, there is no structural relationship between growth
and inequality. Second, income inequality levels in the
pre-globalization phase were generally immobile and
trendless.

14. Income inequality can be affected by the composition of
the workforce which has changed in many countries due
to increased labor force participation of women and
immigration. Also, changes in taxes and government
transfers often have a substantial impact on disposable
income and inequality. However, it is unclear to what
extent these developments and changes are driven by
broader economic pressures related to technology or
globalization, the hypotheses that are of greatest interest
for this paper.

16. In a regression analysis we investigate the relationship
between inequality and globalization. The results show that
our globalization index explains only 7-11 percent of the
variations in income inequality among the countries. By
decomposing the aggregate globalization index into four sub-
components, results show that personal contacts and
technology transfers reduce inequality, while economic
integration increases inequality. Political engagement is
found to have no significant effects on income inequality. In
controlling for regional heterogeneity, we find that the
regional variable plays an important role in the explanation
of variation in inequality.

18. The evolution of income and wage inequality is a complex
phenomenon, driven by many factors that must have played
different roles in different countries. In fact, developments
in income and wage inequality differed appreciably across
advanced economies. In particular, changes in wage
inequality occurred at different times and in different parts
of the wage distribution across countries. Labor markets in
the United States and the United Kingdom witnessed some
polarization, but the evolution of wage distributions in
euro-area countries has not followed any common trend and
has remained relatively stable in several countries.

20. There is currently no consensus on why inequality
increased in some industrialized countries, but not in
others. Some argue that increased inequality, where it
occurred, was driven by skill-biased technological
change and a changing distribution of job task demands,
spurred directly by advancing information technology
and indirectly by its impact on outsourcing. This has led
some observers to lay the blame squarely on
globalization and to call for protectionist measures.

22. Thank
You!
Best Regards,
Anıl Sural